*IN EXCEL PLEASE*

1) A movie studio sells DVD to VideosRUs at $10 per DVD which costs $1. VideosRUs prices each DVD at $19.99 to its customers. VideosRUs pay a fixed ordering cost of $500 per replenishment for DVDs and the movie studio pays $1000 for each order. The inventory holding cost at both parties is 20%. The mean demand for DVDs is 5,000 per month.

a) How many DVDs should VideosRUs order Given that it is trying to minimize its ordering and holding costs? What is the annual ordering and holding cost for the VideosRUs as a result of this policy? What is the annual ordering and holding cost for the movie studio as a result of this policy? What is the total inventory cost across both parties as a result of this policy?

b) What lot size minimizes the inventory costs (ordering, delivery, and holding) across both parties? How much reduction in cost relative to (a) results from this policy?

c) Design an all-unit quantity discount that results in the VideosRUs ordering the quantity in (b).